Calf and feeder cattle prices sagged lower this week—sharply lower in some cases—amid plunging cash fed cattle prices and a break lower in futures markets.
Overall, steers and heifers traded $2-$7/cwt. lower, according to the Agricultural Marketing Service (AMS).
Feeder Cattle futures closed an average of $5.47 lower week to week on Friday (3.67 to $6.27 lower).
“Feeders (futures) would’ve been even lower on the week if not for the correction on Thursday, when the deferred contracts were $1.50-$2.00 higher,” says AMS analysts.
“It is very apparent that lightweight calf prices are beginning to wane as summer inches closer. These lightweight calf prices will continue to grind lower as summer heat takes the place of spring rains and as demand softens,” says Andrew. P. Griffith, agricultural economist at the University of Tennessee, in his weekly market comments. “Alternatively, heavy feeders generally begin strengthening through the summer months as calf-fed cattle come off feed and supplies of long yearling cattle dwindle.”
Even so, with futures prices struggling currently, Griffith adds gaining price ground this summer could be a tough slog for yearlings.
USDA’s Economic Research Service forecasts feeder steer prices for this year at an average of $138-$144.
Fed Cattle Prices Succumb to Supply
“Steer and heifer slaughter ramped up in recent weeks to the tune of 523,789 head (week ending May 5), the largest fed cattle slaughter since August of 2011,” explained AMS analysts on Friday. “Estimated cattle slaughter of 660,000 head last week, if realized, will be the largest since June 2013 when the actual slaughter was reported at 659,702.”
Negotiated cash fed cattle trade finished the week generally $7-$10 lower, depending on the region, at $112 to $117/cwt. Dressed prices were $4 to $10 lower than the previous week at $180-$185.
“Packers bought a significant number cattle for 15-30 day delivery in recent weeks: an average of over 32,000 head per week for the last 10 weeks,” AMS analysts say. “That 10-week average is the largest since AMS started tracking the data point in 2010.”
Live Cattle futures closed an average of $4.12 lower week to week on Friday ($2.92 to $6.20 lower).
“Looking back one year, finished cattle prices declined $30 from May through late August and early September,” Griffith says. “It is doubtful cattle feeders are concerned with a similar price decline at this time, but it is well within reason for prices to reach year-ago levels in the $104 to $106 range.”
Wholesale Beef Values Remain Strong
“Choice cut-out looks to be topping, with current production and anticipation of upcoming slaughter rates weighing on prices in the coming weeks,” AMS analysts say.
In the meantime, Griffith explains, “Wholesale beef prices are at their highest level since June of last year when Choice beef eclipsed the $250 mark. Though the march of wholesale beef to higher prices has slowed the past couple of weeks, it is reasonable to expect prices to continue escalating the next couple of weeks. Even if prices do not advance much more, they will likely stay elevated through May and much of June.”
Choice boxed beef cutout value was 24¢ higher week to week on Friday at $231.21/cwt. Select was 23¢ lower at $208.46.
Friday to Friday Change*
Weekly Auction Receipts
|
Receipts May 18 |
Auction (head) (Change) |
Direct (head) (Change) |
Video/net (head) (Change) |
Total (head) (Change) |
|
190,400 (-26,000) |
36,000 (-18,700) |
24,500 (+18,500) |
250,900 (-26,200) |
CME Feeder Index
| CME Feeder Index | May 17 | Change |
| $133.58 | – 2.54 |
*Thursday-to Thursday for CME Feeder Index
Cash Stocker and Feeder
North Central
| Steers-Cash | May 18 | Change |
| 600-700 lbs. | $165.44 | – $3.89 |
| 700-800 lbs. | $150.03 | + $1.94 |
| 800-900 lbs. | $135.41 | – $2.50 |
South Central
| Steers-Cash | May 18 | Change |
| 500-600 lbs. | $163.56 | – $6.42 |
| 600-700 lbs. | $152.17 | – $6.49 |
| 700-800 lbs. | $141.44 | – $2.76 |
Southeast
| Steers-Cash | May 18 | Change |
| 400-500 lbs. | $163.56 | – $6.42 |
| 500-600 lbs. | $152.17 | – $6.49 |
| 600-700 lbs. | $141.44 | – $2.76 |
(AMS National Weekly Feeder & Stocker Cattle Summary)
Wholesale Beef Value
| Boxed Beef (p.m.) | May 18 ($/cwt) | Change |
| Choice | $231.21 | + $0.24 |
| Select | $208.46 | – $0.23 |
| Ch-Se Spread | $23.75 | + $1.47 |
Futures
| Feeder Cattle | May 18 | Change |
| May | $132.225 | – $6.200 |
| Aug | $137.625 | – $6.275 |
| Sep | $137.800 | – $6.175 |
| Oct | $138.325 | – $6.150 |
| Nov | $139.325 | – $5.600 |
| Jan ’19 | $136.450 | – $5.050 |
| Mar | $134.425 | – $4.600 |
| Apr | $135.050 | – $3.650 |
| Live Cattle | May 18 | Change |
| Jun | $102.400 | – $5.225 |
| Aug | $98.225 | – $6.200 |
| Oct | $101.700 | – $5.775 |
| Dec | $107.650 | – $4.150 |
| Feb ’19 | $110.950 | – $3.650 |
| Apr | $111.875 | – $3.150 |
| Jun | $105.800 | – $2.975 |
| Aug | $105.175 | – $3.025 |
| Oct | $106.325 | – $2.925 |
| Corn futures | May 18 | Change |
| Jul | $4.024 | + $0.060 |
| Sep | $4.110 | + $0.060 |
| Dec | $4.202 | + $0.058 |
| Mar ’19 | $4.282 | + $0.050 |
| May | $4.326 | + $0.046 |
| Jul | $4.372 | + $0.052 |
| Oil CME-WTI | May 18 | Change |
| Jun | $71.28 | + $0.58 |
| Jul | $71.37 | + $0.69 |
| Aug | $71.11 | + $0.64 |
| Sep | $70.62 | + $0.53 |
| Oct | $70.08 | + $0.42 |
| Nov | $69.57 | + $0.33 |
Equities
| Equity Indexes | May 18 | Change |
| Dow Industrial Average | 24715.09 | – 116.08 |
| NASDAQ | 7354.34 | – 48.54 |
| S&P 500 | 2712.97 | – 14.75 |
| Dollar (DXY) | 93.67 | + 1.12 |